Advertisement
credit & debt

How to Opt Out of Forced Arbitration

Some Chase credit card holders will have a binding arbitration clause added to their card agreement. Here's what you need to know.

Heads up, Chase credit card customers: The issuer is adding a binding arbitration agreement to nearly all of its cards (excluding the AARP card)—but you still have time to opt out. Chase will soon bar cardholders from banding together in a class-action lawsuit against the company. Customers will have to settle disputes through arbitration—in which a third party privately makes a judgment—or in small-claims court. But if you send Chase a letter by the date specified in the notice you receive outlining the changes (dates vary and are in early August), you can preserve your right to join a class action.

Write a clear statement rejecting the arbitration agreement, and request a letter of acknowledgment from Chase. Include your name, account number, address and signature, too. Send the letter by certified mail (so that you can prove Chase received it) to P.O. Box 15298, Wilmington, DE 19850-5298. Customers who open a Chase card after the deadline can decline the arbitration clause, too.

Advertisement - Article continues below

About two-thirds of 30 large card issuers include mandatory arbitration in their agreements, according to CreditCards.com. Nearly half of those issuers let customers opt out by sending a letter within a month or two of opening the account, and all but two allow you to take an individual case to small-claims court.

Advertisement
Advertisement - Article continues below

Bank of America and Capital One are among large issuers that don’t require arbitration. But more issuers may start imposing it. In a settlement several years ago, some issuers—including Bank of America, Capital One and Chase—entered a moratorium on arbitration clauses, which has since expired, says Myriam Gilles, professor of law at Yeshiva University’s Benjamin N. Cardozo School of Law.

The ability to opt out of arbitration may not be as meaningful as it appears. Most customers won’t act on it, so “it’s more a way to soften the public-relations blow” for the company, says Lauren Saunders, associate director of the National Consumer Law Center. Plus, says Gilles, attorneys would be hard-pressed to pull together a class action with the consumers who do opt out.

TAKE OUR QUIZ: Will It Sink Your Credit Score?

Advertisement

Most Popular

2020 Stock Market Holidays and Bond Market Holidays
Markets

2020 Stock Market Holidays and Bond Market Holidays

Is the market open today? Take a look at which holidays the stock markets and bond markets take off in 2020.
July 1, 2020
What Are the Income Tax Brackets for 2020 vs. 2019?
tax brackets

What Are the Income Tax Brackets for 2020 vs. 2019?

The IRS unveiled the 2020 tax brackets, and it's never too early to start planning to minimize your future tax bill.
June 20, 2020
Searching for the Perfect Place to Retire
Empty Nesters

Searching for the Perfect Place to Retire

We home in on two places with less traffic and lower costs. 
July 2, 2020

Recommended

For Financially Responsible Kids, Do NOT Do These 3 Things
family savings

For Financially Responsible Kids, Do NOT Do These 3 Things

The key to putting your kids on the right financial path can be boiled down into one sentence.
July 1, 2020
10 Tax Breaks for the Middle Class
tax deductions

10 Tax Breaks for the Middle Class

Tax breaks aren't just for the rich. There are plenty of them that are only available to middle- and low-income Americans.
June 30, 2020
The Answers to More RMD Questions
retirement

The Answers to More RMD Questions

The CARES Act made 2020 required minimum distributions optional. But what are your next moves?
June 12, 2020
Travel Planning in the Time of Coronavirus
business

Travel Planning in the Time of Coronavirus

Insurance may not cover canceled vacations, but airlines and hotels may be flexible.
June 11, 2020